Europe Woes Deepen as Economies Contract

Slump in Euro Zone's South Infects Germany and France, Jarring Hopes for a Return to Growth; 'So Many False Dawns'

By

Brian Blackstone and

Christopher Emsden

Updated Feb. 14, 2013 7:25 p.m. ET

FRANKFURT—The euro zone's economy shrank last quarter at the fastest pace since the height of the world recession in early 2009, as a worsening slump in Italy and other southern European countries infected the bloc's core economies of Germany and France.

The 2.3% drop in euro-zone gross domestic product in the fourth quarter, at an annualized pace, suggests that Europe's economic and financial crisis is far from over. The region's...